Currently, my situation is as follows: I'm currently running a PC with Vista Home Premium 32-bit, an Intel Dual Core E6300 2.8 GHz, 2 GB RAM, 500 GB HDD and an Nvidia 512MB 9400 Video Card. Everything is pretty much maxed out on my build (RAM and HDD space) and I'm looking to do a pretty big upgrade in the near future.

Laying it out straight forward, I would be upgrading to an i3 or i5, both being Dual-Cores, 4 GB RAM, 1.5 TB HDD and keeping my 9400GT video card.

With that said, my budget is around the $400-$500 area and I have a question or two about what I plan to upgrade with (links above) and what I intend to use this build for.

Obviously I will be using this build for After Effects (probably still CS4), and I will be editing HD footage with it.

Will these specs be good for editing HD footage in AE? - Will the Dual-Core CPU and 4 GB RAM be sufficient?

Would this build be powerful enough to work with both Premiere and AE up at the same time?

And also, I assume I will be able to do this (but just checking), but this build will allow for upgrading my CPU seeing as the socket for i5 Quad-Core is the same as Dual-Core correct?

tl;dr: Will this new build be able to run AE with HD footage efficiently without any hiccups and allow for upgrading in the future - say to a QuadCore i5 or i7?

4 GB of RAM is not really enough for AE, much less running it and Premiere at the same time. Read this.

However, I would point out that I've worked with HD footage on a machine running AE 7 and having only 1 Gb of RAM and a Pentium 4 processor (without even hyperthreading) and I didn't have any "hiccups" it was just slow. Hiccups depend more on what kind of footage/codec you're using. I certainly wouldn't suggest anything with interframe compression (HDV ones such as .M2T, or .MTS). If that's what your camera shoots, then you'll probably want to transcode it to something friendlier like Quicktime with the PNG codec (not a PNG sequence).

I'm going to second the suggestion that you read through this post and all of the links on it. It should help you.

The more processing power you have for AE, the better. That is, as long as you have the RAM to back it up. With CS4 you want between 2-4 Gigs of RAM per core of your processor. With CS5, you can have more. DO NOT TRY TO USE LESS. If you only have four gigs of RAM, you'll have to turn off multiprocessing.

Unless you only do very basic 2d layer animations in After Effects, there are going to be a lot of times when you will have to wait for renders, that's the nature of the game. There are some ways to speed things up though, the following is from Walter Soyka at CreativeCOW.net:

If you're used to working with SD or even HD comps on modern computers, the render times for larger comps can be stunning. I frequently work with large comp sizes (4K and up), and I've found it's very helpful to adapt my workflow a bit to stay productive despite the lengthy render times.

There's an outstanding page on Improving performance in the After Effects help system, which includes all the features I'll mention below and many others.

Here are some After Effects features—some common, some often-overlooked—that I rely on when working with larger comps:

Multiprocessing: if you have a multi-core system and at least 2-4 GB of RAM per core, you can enable multiprocessing. After Effects will launch multiple copies of its renderer to processing multiple frames simultaneously.

Zoom and resolution: these go hand-in-hand. You can reduce your preview resolution to save processing time and RAM.

Caps Lock: when on, Caps Lock disables rendering for preview.

Draft 3D, frame blending, and motion blur: toggle these to speed up previews. For render, you'll probably want Draft 3D off, and frame blending and motion blur on, but they are all render-intensive, so you can save time by toggling them for working and preview.

Proxies and pre-rendering: allow you to render out a complex pre-comp, save it to disk, and refer to the footage on disk instead of re-rendering. Once I get a pre-comp working well, I'll proxy it so I don't have to continually re-render it during previews while working on other elements. You can use proxies with a wide variety of settings: simple stills, draft-quality renders, or high-quality renders. If you use proxies instead of pre-renders, make sure you change your render settings in the render queue to use proxies.

Region of Interest: allows you to select a smaller section of the comp to preview; saves on processing time and RAM usage.

Shift-RAM preview: allows you to choose different setting for RAM preview (0 on the numeric keypad) and Shift-RAM preview (Shift-0 on the numeric keypad). I use regular RAM preview for high quality previews so I can see detail in my work, but I use Shift-RAM preview at quarter or eighth resolution, skipping at least every other frame, so I can quickly see the overall effect.